Sent to you by Nilesh via Google Reader:
Dick Bove is now suggesting that Goldman Sachs might have had no big net short on the subprime market.
It's surprising because Bove put a "sell" rating on Goldman after the Senate's big report on the subprime crisis, which accused Goldman of having a huge subprime net short.
And now having looked over the numbers with Goldman, Bove has *almost* completely changed his tune on Goldman, according to Dealbook, which has an excerpt from the report the analyst recently published about the firm.
The bad news: His "sell" rating still stands ("the earnings estimates being made for this company for the second quarter and year are much too high," he writes).
And of course, Goldman already basically announced that the Senate's numbers are wrong. Bove's just saying that he agrees with them.
He's saying it with a "sell" rating, but he also writes: "It is becoming increasingly apparent that a terrible wrong may have been done to Goldman Sachs... Evidence is now mounting that the company did not have a net short position at a crucial time under study and that the Senate Committee may have misread the numbers."
It's not vindication until the Senate backtracks, but it's the best news we've heard about Goldman's subprime short (or "hedge," as Goldman calls it) in awhile.
The bottom line is that he doesn't think that any of the current charges against Goldman will result in anything, but he's also not leaving future investigations off the able.
He told Dealbook, "I don't believe whatever they have done wrong anyone has discovered it."
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